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Factors influencing choice of locations - Coggle Diagram
Factors influencing choice of locations
Proximity to market/customers
Bulky or perishable goods manufacturers need to be close to their customers as the goods can't go long distance
Consumer goods manufacturers can reduce the costs of transport by locating close to customers
Businesses may need t be located near population
If the product is targeted at older-aged people - important to locate where they live
More important for businesses that provide a service rather than a product
Proximity to competitors
Some businesses choose to locate in an area known for their products
This draws customers to the area and if they don't find the product they are looking for in one shop they may try another close by
Other businesses want to find a place where there is no competition
Availablity of labour
How close work is avaliable
It is important for a new business to locate to where there is an adequate supply of labour with the right skills
Many areas have specialism
Devon and Cornwall are known for their dairy
Scotland with Iron Bru and Whiskey
Adequate supply of cheap and skilled labour is necessary for business
Some businesses may move to areas of high unemployment so there is a large pool of applications for any job that advertise
Government grants
Some businesses may decide to open in a certain location because they have been given a government grant
Government grants do not need to be paid back, they are given to businesses to encourage them to set up in areas which have high unemployment
Proximity to raw/material
A business start-up will need to think about its location in terms of proximity to materials
The closer a business can be to the raw materials it needs for production, the lower the costs of production will be
Costs
Having premises are expensive
Often the second largest cost after wages
Because have to pay rates, insurance and other ongoing costs, as well as the rental or purchase costs
Costs higher in town centres / shopping centres
Startups likely to have limited finance
Existing business are likely to have competitors and will want to costs low